The rupee had closed at 88.26 on Friday (September 5) after briefly touching a record intraday low of 88.38, before recovering marginally to end at 88.09. On September 2, it recorded its lowest-ever closing level of 88.15.
The forex market remained shut on Monday (September 8) due to a state holiday in Maharashtra.
Traders attributed Tuesday’s early strength to weakness in the dollar globally, after US non-farm payroll data came in below expectations and the unemployment rate rose to 4.3%.
The dollar index slipped 0.05% to 97.40. Markets now expect a Federal Reserve rate cut at the September 17 FOMC meeting, with some participants even anticipating a larger 50-basis-point cut.
Despite the softer dollar, analysts said the rupee continues to remain Asia’s weakest currency amid global uncertainty and India-specific concerns.
“While softer US data and potential Fed policy shifts could provide some support to the rupee, India’s trade and tariff headwinds may cap any recovery, keeping upside risks intact,” said Amit Pabari, MD, CR Forex Advisors.
Brent crude prices also edged higher, trading at $66.37 per barrel, adding pressure to the rupee’s outlook.
Market participants are also watching for US inflation data (CPI) for August, due Thursday (September 11), which could further influence the dollar’s direction. Meanwhile, comments from White House trade advisor Peter Navarro, who warned that India “must come around” in trade negotiations with the US or risk fallout, have kept investors cautious.
Forex traders said the rupee is likely to remain under pressure in the near term, with the Reserve Bank of India expected to intervene if depreciation gathers pace.
-With PTI inputs
First Published: Sept 9, 2025 11:59 AM IST
